Monthly Archives: May 2010

Nassim was the feature speaker at ai5000’s Chief Investment Officer Summit in New York (May 2010). The summit had more than $1 trillion in pension, endowment, foundation, and insurance fund assets under management represented at the event. The following videos are from a Q&A with him (before) the event.

The most important issues for Chief Investment Officers (CIOs)

Summary

Be over insured, have as low leverage as you can.

Change your way of thinking by adopting at your core a defensive strategy.

Don’t be afraid of being aggressively in cash.

Avoid clustering, following what other CIOs are doing, following the crowd just because that is what everyone else is doing.

Use Taleb’s ‘Barbell Strategy’: Be very aggressive with a small part of your portfolio, and massively paranoid with the rest, giving on average medium risk portfolio. This strategy means cannot lose more than a certain amount of money that you have already allowed for the possibility of happening. Your actual risks are not dependant on a prior computation of risks.

The key central point is to generally be robust, namely being resistant to adverse shocks (black swans).